By Akash Sriram
(Reuters) -Uber’s core ride-hailing business posted its slowest revenue growth since the pandemic in the first quarter due to sluggish U.S. travel demand, but executives signaled confidence in navigating the economic uncertainty with an upbeat forecast.
The company has been leaning on international markets and partnerships with autonomous taxi operators to sustain the rapid growth of the post-pandemic quarters and shore up investor confidence.
CFO Prashanth Mahendra-Rajah told analysts on Wednesday the company saw a “slightly higher mix of international trips, and that’s a bit due to lower inbound U.S. travel.”
Vacation rental firm Airbnb had also flagged weaker U.S. travel demand as the Trump administration’s erratic trade policy hammers consumer sentiment, and trade data on Tuesday showed foreign spending on U.S. travel in March fell by the most since the pandemic.
Uber’s revenue rose 14% to $11.53 billion in the first quarter, missing estimates of $11.62 billion, according to data compiled by LSEG. Ride-hailing unit revenue rose 15%, while the delivery unit posted an 18% increase, in line with estimates.
However, the company forecast second-quarter bookings and adjusted earnings above Wall Street targets, a sign that its growing international presence and sprawling delivery business could shield it from the U.S. travel slowdown.
“The categories we operate in … tend to be categories that are quite consistent, even during periods of macro uncertainty,” CEO Dara Khosrowshahi said on a post-earnings call.
Investors have been bullish on the stock, with Uber climbing about 42% this year, making it one of the top 10 performers on the S&P 500 index.
The stock pared losses to edge about 1% lower on Wednesday after falling more than 6% in early trading.
The company agreed to buy a majority 85% stake in Turkish food and grocery delivery platform Trendyol Go for $700 million earlier this week. It also partnered with Pony AI to deploy the China-based robotaxi developer’s vehicles onto its platform.
Uber, which launched robotaxis in Austin, Texas, through a partnership with Alphabet’s Waymo this year, said the service has seen high utilization rates and will increase the number of vehicles in the city.
The company expects gross bookings to be between $45.75 billion and $47.25 billion for the current quarter, compared with estimates of $45.83 billion. Adjusted core earnings are expected between $2.02 billion and $2.12 billion in the period, compared with estimates of $2.04 billion.
Jamie Meyers, senior analyst at Uber shareholder Laffer Tengler Investments, said he was not concerned by Wednesday’s stock drop because the company had strong fundamentals.
“We see the miss as immaterial, and as such, believe the stock will recover,” Meyers said.
(Reporting by Akash Sriram in Bengaluru; Editing by Sriraj Kalluvila)
